Due to the uncertainty surrounding U.S. policies, trade tensions, global military conflicts, and overall socioeconomic uncertainty, gold reached a record high of $2968 (~Rs 86350) for a week before retracing lower.

Gold touched a record high of $2910 (~Rs 85200) as traders reacted to President Trump’s threat of new reciprocal tariffs, enhancing its safe-haven status. Now the question is, when will it touch $3000?

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After hitting an all-time high last week due to rumors, the price of gold dropped by almost 1% today as the U.S. dollar strengthened on growing concerns of a global trade war following U.S. President Donald Trump’s sweeping tariff measures.

The gold market is on track for its greatest monthly performance since September and is having its best start to the year since 2023 as prices test the upper end of their range near $2790 (~Rs 80300).

Gold has risen more than 3% and silver by 7% in January-to date, supported by safe-haven demand amid political and economic uncertainties. The main factor supporting prices is the speculation that President-elect Trump will impose tariffs after his inauguration ceremony on January 20.

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The main theme of the first week of 2025 was the strength of the US dollar. The strength of the Greenback may limit the upside potential of dollar-denominated gold, as a higher USD makes gold more expensive for buyers using other currencies.

Gold is expected to finish the year up 27%, its greatest yearly performance since 2010. This spike has been supported by central bank purchases, rising geopolitical risks, and major central banks’ monetary easing. Rising global tensions have supported gold’s resilience this week.

It seems that Gold will not fall below $2500 (~Rs 73000) in the upcoming months due to the expectation of lower interest rates, the continued elevated geopolitical risk, and the uncertainty surrounding the Trump administration’s implementation of protectionism policies.

The expectation of lower interest rates, ongoing elevated geopolitical risk, and uncertainty around implementing protectionism policies under the Trump administration are the main reasons demand will get supported and find a floor for gold prices around $2500 (~Rs 73000) in the coming months and won’t fall below this level.

As gold prices have given around 30% returns this year, we will likely witness a bout of profit-booking by hedge funds and ETFs in December, which might put pressure on the prices. But amid geopolitical worries, prices will stay above $2500 (~Rs 73000).

Gold and Silver saw safe-haven flows last week, and rising tensions between Russia and Ukraine caused renewed unease in the markets. I now anticipate impending buying exhaustion this week in precious metals.